Garth Hamilton (Groom, Liberal National Party) Share this | Hansard source

There has been a lot of conversation in my community and around Australia on the role of government spending in inflation and the interest rate rise we saw recently announced by the RBA. The government has told us that there is no connection between government spending and inflation or the interest rate rises, and I want to pick apart two of their claims, because I think it's important to provide facts to this conversation.

Firstly, I refer to a conversation between the Minister for Finance and Senator Paterson at Senate estimates yesterday. The Minister for Finance was quite proud to proclaim that across the term of the Albanese government they'd accumulated $114 billion of savings. This is a true figure—there are $114 billion of savings. But, when asked whether this was a gross figure or a net figure the minister couldn't answer and had to rely upon advisers to tell her that it was a gross figure. So when you prosecute this case a bit further, what is the net figure? What is net savings? You come up with the problem, which is that there has been $142 billion of additional spending. This is outside of indexation. This is $142 billion of new programs that have been brought in across the term of the Albanese government. So a true figure of the savings that have been achieved by the Albanese government is negative $28 billion. We can dismiss the argument that this is a saving government. When a Finance minister is able to understand the difference between net and gross, this is actually a spending government, quite clearly. An example of that would be the home battery scheme the government relies upon as their go-to answer whenever the $275 they promised everybody is. This is a scheme that was originally budgeted at $2.3 billion and has now blown out to $11.6 billion.

The second claim that I want to pull apart is the Treasurer's claim that it is actually private demand that is driving things. Let's have a look at the ABS definition of what makes up private demand. This is what the RBA use. Inputs to this include the aged pension, JobSeeker, the family tax benefit, rent assistance, energy rebates, cost-of-living payments, NDIS payments, any wage subsidies, industry grants, production subsidies and energy subsidies. The thing with demand is it doesn't exist without supply. The supply source of private demand is government. It is government spending. We have seen this time and time again. We have a Treasurer who wants to try to pretend that this private demand is existing without the government supply. As I've just pointed out, the home battery scheme is a great example of this. Yes, that is private demand—the supply mechanism is from the government. This is what is driving our inflation in our country. This is what is driving the RBA's decision-making. It's about time this Treasurer, instead of pretending to hide behind these things, actually addresses what is real. This is a spending government that is driving inflation.

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